Why Zynga Is Poised to Keep Plunging

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online social games operator Zynga has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Zynga and see what CAPS investors are saying about the stock right now.

Zynga facts

Headquarters (founded)

San Francisco, Calif. (2007)

Market Cap

$2.8 billion

Industry

Home entertainment software

Trailing-12-Month Revenue

$1.3 billion

Management

Founder/Chairman/CEO Mark Pincus

CFO Mark Vranesh

Return on Equity (average, past 3 years)

(2.9%)

Cash/Debt

$1.3 billion/$100.0 million

Competitors

DeNA

Electronic Arts

Gameloft

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 50% of the 661 members who have rated Zynga believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, tunafizzle, summed up the Zynga bear case for our community:

Absurdly overvalued. Almost a billion shares out there, market cap is [$3 billion] for a company [whose] profits are negative and has zero products coming out. Any games they do generate revenue on are tied to [Facebook ]. ... Lawsuits, over-valuation, no long term model will make this a penny stock soon. Short it long.

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Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.